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TEI - Energy Outlook

The Rise of Coal in the Energy Mix of GCC

While the Middle Eastern countries look to diversify its energy mix and enhance energy security, coal-fired power plants gain momentum.

Though coal continues to be the dominant fuel in the global power mix, in the oil and gas rich GCC region, this surge is surprising, and more so as coal is being substituted with gas and renewable energy all over to meet climate change commitments.

However, rising demand for electricity and the resulting strain on existing capacity has led coal to feature in the energy planning process of GCC.

Other factors underpinning the inclusion of coal in the power mix are its low operational costs, technological advances in power plant design, and concerns over reliability of gas supply.

Coal power generation require substantial upfront capital of about $1.2bn-3bn/GW of installed capacity, comparable with gas-fired power plants. But the operational and fuel costs of coal power plants over their lifetime, is lower. Additionally, coal plants are a highly reliable and less expensive source of baseload capacity.

Today’s coal power plants are being built with modern pollution control technology that traps sulphur dioxide, nitrogen oxides, particulate matter and acidic emissions. A range of technologies have been designed to greatly reduce the emissions from coal-fired power plants. The advanced ultra-supercritical pulverized coal combustion technology allows efficiencies rates of 50%, with 15% reduction in CO2 emissions compared with supercritical technology.

As the GCC states experience an extraordinary surge in energy consumption, rising on an average of 5% per annum during the 2000s, gas demand across the region is also increased with almost two-thirds of this growth coming from power generation alone.

To avoid uncertainties of gas supplies in power generation and to increase investments in gas-based industrial and petrochemical projects, having an additional source of energy becomes necessary. The GCC states are now pursuing various sources like renewable energy, nuclear power, and lately coal.

In the face of growing regional uncertainties, the UAE looks to reduce reliance on gas imported from neighbouring Qatar to supply its power plants. The UAE’s energy strategy states clean coal will account for 12% of the local power mix by 2050.

First in the group is the Dubai Electricity and Water Authority’s (DEWA) 2.4 GW Hassyan Clean Coal Power Plant. Additional phase of Hassyan coal complex is planned with a capacity of 1,200MW. Federal Electricity and Water Authority (Fewa) has planned a 1.8 GW plant in the northern emirates.

Oman is the second GCC nation to launch the development of a coal-based power plant. The maiden coal-based project will be built in the Special Economic Zone at Duqm and will have a capacity of around 1,200 MW.

Though coal is likely to play a limited role in the region’s energy mix, but before switching to coal to augment power generation, technical ability to build clean coal plants must be ensured in order to adhere to Paris Agreement to combat climate change.


Pallavi Agrawal